AutoWeb (AUTO) 27 Mar 202019 Q4 Earnings call transcript

Good morning, everyone, and thank you for participating in today’s conference call to discuss AutoWeb’s Financial Results for the Fourth Quarter and Full-Year Ended December 31, 2019.

Joining us today are AutoWeb’s CEO, Jared Rowe; the company’s CFO; J.P. Hannan; and the company’s outside Investor Relations Adviser, Sean Mansouri, with the Gateway Investor Relations.

Following their remarks, we will open the line for your questions.

I would now like to turn the call over to Mr. comments. introductory some for Mansouri

Thank you.

statements SEC. I I’ll and in filings statements today’s the historical of and you or are projections, during release intent contained or forward-looking by Jared, including Before facts, financial the statements with or any not covered remind disclaimers call, are question-and-answer that that the today’s public events Harbor are introduce press session, performance future company’s regarding belief the including future statements Safe

Actual may by is forward-looking results outcomes in statements. expressed what and from materially differ or these implied

XX-K Specifically, as the differ materially please could refer made SEC to the forward-looking other These those as from to ended company’s by XXXX, that Form filings XX, time results with factors the for from cause December to filings statements. AutoWeb year well time. identify

note adjusted disclosing is the as A today’s Please the release, measure non-GAAP will this financial EBITDA. press included by financial This during company’s reconciliation SEC on also is management measure GAAP a which measure Regulation directly G. comparable non-GAAP this defined call, be website. posted in that of most is to

And with Jared. to call that, the turn over I’ll

questions best acknowledging do to to at it to Thanks, morning, good them. everybody. by We relating the COVID-XX. I clearly going a to relates future, answer we’re our a we’re the Sean, of call have today want just lot period of and as and that, operating start to uncertainly you know

and continuity operations affected and has been really and Our dealers our safety health by OEM virus, priority really of with top ensuring thoughts the the are our customers. everybody employees and for that’s the our of

quarter for progress brief our results providing and to the we year. start overview made I’ll the out by out close a the So that of fourth

I’ll and COVID-XX. of the However, in dedicate given time we’re current the of what circumstances to Pardon the our me. business state on most doing pandemic, surrounding the response

include establishing much talked with focusing sold towards that through same improving traffic on operating a clicks we conversion, of and fourth resources the laid our efficient the can level. continue the initiatives profitability, on we at to key the quarter, clients. about quickly and initiatives We’ve These of our acquisition So out drive we and the strategy right mix right being as of our mix as leads lot to XXXX.

much we’re a dealers We’ve seller transactional to retail of going and of focus leads done traffic selling valuable generate, a and ourselves position more better the strategic to products. a better just we continue job clicks on as and not partner monetizing to to

lean, included team the some the focus delivering operating we level, our reduction we continued fixed cost generating that efficient our and level the not we’re maintained running of a we’ve structure. improvements on the to expensive that roles needed. At of This improvements a organization value make and to in

So we made and there. some went ahead changes

volatile topics period. Our operational current not this driving And is intact that COVID-XX. on the more work I’ll is make focus on and of I’m the later lose our and productivity transition during proud lot response organizational the really remains call. this to a in and discuss team of doing efficiency these to have to

J.P.? commenting to through QX over it walk the before like But highlights full-year to to I’d J.P. and further, of results, turn

Jared, Thanks, and everyone. good morning,

release our to So the themes our focus refine call, item every and as key year, you that on in than reviewing filings. around commentary continue last our approach we find press mentioned to on on line to can going quarter more we’re and the rather the calls these

with million. total revenue So in $XX.X quarter the came that, in at

year-ago and million $X million quarter. the So about $X that’s quarter down from last from

volume total that’s million, in revenue the our expected and points year-ago a channel quarter. last down from slightly increased to a in The lower from revenues few $X.X sales advertising decline Our up stems mix. quarter from

So is flat opposed This was the as $X in the That’s reflected to on continuing last despite business. quarter volume gross OEMs. at selling focus our compared value we’re reduction to thus, to dealers clicks profit our more situation further nearly gross retail a and a selling the overall profit million to in to revenue. line as similar

of down while revenue and same we in to So our highest about also all click sequentially was generated traffic QX, per X we X million had the we visits million and posted year-over-year, volume year. level click click

which also basis in from from and is I but quarter came last is year-over-year profit acquisition was higher-margin more and gross mentioned, XX.X%, driven gross gross flat mix. channel quarter forma margin at million, from The by improvement year-ago Fourth and flat relatively was margin quarter as fourth Our which a the $X.X points QX much pro from traffic product efficient XXX up last quarter, XXXX number. quarter. a

$X.X or net million, $X.X QX the a per loss Our of in quarter per a loss loss XXXX $X.XX million, share. and QX in per $X.XX a fourth XXXX. million, to or a was share loss in And XXXX share of of net or $X.X $X.XX of that compares of loss of

Our down just of quarter $X which year-ago the up EBITDA from $XXX,XXX, for the under from than is million million adjusted but fourth quarter. was loss $X more last a quarter,

last $X.X $X.X $X.X in year. from in was million quarter used cash fourth in net operations the million, fourth last the million and up Our quarter quarter

and Now cash operating expenditures. compared the XXXX XX, the at restricted of decrease year. cash, last that capital $XX.X from and XX, XXXX, the This $X.X in $X.X to stood and cash September end was funding by of XXXX equivalents at million end at of and our our our million losses December million driven

work of Bank. has credit we financial million of finishing covenants. AutoWeb, facility, million signed $XX going had we million Earlier ongoing on facility credit an turnaround in much $X.X we revolving Northbridge this PNC as we week, This our CIT our XXXX, is facility us the balance off to with $XX revolving credit with balance flexibility December maintenance facility Capital. a paid new and former XX, since outstanding outstanding had on offer as Now, we more this that continue no

approximately revenue million, about year. results. was Now million through XXXX, In down last $XXX quickly running from the that’s total full-year $XX

Our advertising million XXXX. down that’s million, and $XX.X about $X revenues compared of to

in $XX.X was expenses year. down million, last $XX XXXX that’s from and operating about million Total

expenses a reminder, our million. charge totaled goodwill a XXXX charge, $X.X a did and impairment asset include As long-lived one-time which impairment

compared loss in excuse million $XX.X me, share EBITDA, in $X.XX net $X.X year. $X.XX Our per million full-year of and a or loss $X of last net loss million, a loss loss of loss of was compares $XX.X to XXXX. or per Adjusted – to XXXX was a a million, $X XXXX that million, compared million, to share, $X.X

to the on the fourth our now same full-year metrics. And tells The operational story quarter. as

being simply we’re So put, have. we effective what with much more

by million visits lead was about million. only down lead Our volume traffic to by XXX,XXX down The million. X XXX X.X leads was to

to own click by Our while X million actually visits click traffic million XX.X our million, X.X was down increased volume sites approximately by own site’s clicks.

Now as to as count of past, was at XXX higher the XXXX. delivering dealers dealer X,XXX orders. end dealership by requested we’ve to necessarily level, increase the our percentage also of the compared down our mentioned Lead a we’re as our customers’ have lead retail to doesn’t dealers long down. But in capacity was about capacity

I’ll remarks. call my concludes ��� call that to Jared. the turn now back And prepared that, with So

Thanks, J.P.

communication right new adapt an go high And business on that continuity, XXXX. what I we’ll plan So to address sometime a then take technology action to our at we’re review want our earlier, into to and operations, developing plan in and as discuss client as I mentioned infrastructure we to environment. level focused questions. we’re

lean, various then miscellaneous So organization. we in expenses pandemic, more operating and personnel-related considerable efficient of a vigilant can expense categories efficient expenses, with. more cost may We’d are we maintaining other to already become taken terms continue out reductions the operations, other to any target become prior of the in ever more efficient marketing COVID-XX and our that about business we but than

will to market continue people to business. improvements on against we and We fully as environment spending plan we’re the current the dollars efficiency more across and driving leverage as these personnel-related productivity through focus our work the that needed

notes reduction quick too, people our And together transition year-over-year, with translated this one of team. is, we’ve a That is on remember, look to that thing couple you been it’s when in about just XX%. made costs. to XX% A a reduced by headcount at about

added by the also hired has team new management of new lot a roughly We members, over last been current team XX% two the the team of years.

team So I’m the work that business, made. of year-and-a-half, sort we’ve ultimately, had area the to potential that of done in really in the this has business significant, disruption improvements we’ve kind of transition manage of last significant the really the this over proud this but and

for marketing Now expenses.

bids. spend actively and We’re back being in dialing search selective our more

quality please clients’ And to these we this result this sell a we’re revenue, lower lead While car. is volume, we our on defined margins. focused ability that really lead talk and volume, expect improve our consumers them by will to delivering which gross when in contact about remember

We few our next buck over our spend. going shape the historical the buying back over used And really and to need the that closely SEM lead patterns to weeks monitor the help on quality to it’s pulled likely months. spend years. we’ve We

levels. back orders last state and have the try new stoppages spend reality the announced that to over and considerably as adjust stay of that at several fairly you pulled county some the on the local and home to Just can of anecdotally, imagine, we and the retail weeks, been

interesting reduced the hasn’t lower expect, as is simply the much what’s what’s because as been much back margin going to hasn’t and we’d volume, characteristic so as pulled with is as see back, the necessarily we’ve been come And the we’d what’s with on expect, much as with auction. going because it on demand meaning, also volume

our also really going So of our patterns the the the this monitor to have with of with SEM really to needs consumers. we’re spend of clients, try closely align reality new new and shopping to

the infrastructure our COVID-XX technology had on touching quickly a workforce U.S. teams and of remote pandemic. cross-functional and a across always in Guatemala. So We’ve bit the teams and amid

an home because team place we’ve decentralized plenty have now. existing even tools model, for a from over full we support had our processes and week more So in of to working

we represent most been a of and a teams clustered change in critical have how does been historically together at collaborative. the have manage day-to-day highly this and the some bit However, operations of they

this business. to team going the over environment. that So last and monitor to approach to and able But evolve pleased things I’m transition efficiently with complete continue we’ve continue closely the manage productivity home to gone if how have necessary to pretty a ensure week-and-a-half our from been how work we to we’re

Now in dealers their an challenging contracts. voluntary to customers provide we are effort suspension to further this them during time, and with flexibility support offering our retail

their or their are needs. packages and So media they dealers their that ensure working staff, close operations aligned to dramatically reduce business them we’re as with with current

we and status, Anecdotally, that next we’ve suspended expect got over category in this current to $XXX,XXX impact of month.

We market also a conditions grow change. the as to expect bit that

Now, and the I is, accounts. that that dealers reason strategic also some mentioned our retail these are because of

disproportionate for the on impact of impact margin month next So the or the the have business two. a will

But our goals that goals and AutoWeb. we’re organizational we’re actively complete And the our as market the still those to prepared refine where approach necessary throughout work working really to conditions still of have achieve evolve. the But towards we to drove business XXXX. do turnaround

this place headwind, do put ago. a that that good done on the in is So about work feel we’ve while good another feel year-and-a-half path and about we that, continuing year, we the we

click improve from must consumer and means perspective. a products focusing to far mix. our both be sales fulfilling more and consumer From first, and mobile approach optimization of product content-rich perspective, a that engagement we evolving and But on product lead channel both our

enabling Now, but a than quality talked last we job products We of a did our isn’t we the year lot our work our in XXXX, we did done. considerable improvements mobile made to good there. about and products

our Now good focus products to XXXX. it’s that’s bit mobile time optimize for and of a

leads more sales to endemic means clicks to near and and a channel perspective, endemic From more selling advertisers. dealers improvement retail

a to Now, strategic AutoWeb as will be our a positioning vendor and a this mentioned, as transaction. just selling customers accomplished I by partner not

our sales margin gross expect in channel improves, our improve lockstep. mix to we As

made we’ve here. Again, progress good

we perspective clicks at everything and achieved sales we cross-selling It’s finally with all in have haven’t to. a at strength. strength – full rate and progress we’re long leads But retail since our the full gotten been been we’ve wanted attach way haven’t made well. as We improving time from good we a

changes do to work I made, changes some good the in upgraded some place. and the pay we the over long-term, that that we’ve do. to going got But of we’ve we’ve dividends talent motion how selling are there. still So the to have medium to about work feel but It’s

continuing means level, this our even manage resources continue more is XXXX. focus spending to conversion, run throughout effectively operating a have and imperative continuing Second, at as lean the to all of we we efficient while on must That current environment. which acquisition, traffic to in

turnaround. these we we can’t by So I this initiatives, accomplishing complete our stress believe can enough.

turning made results, to far We produce the revenue proper are it we not incredibly little is that being challenges, revenue focused for the will profitable sake without simply bit. just goal timeline on not margin. a more our COVID-XX of current and the change difficult but due alters This does

So mentioned provide a as new challenging need us facility this Northbridge we revolving which is time. going J.P. flexibility established we with secured $XX during earlier, CIT million with to credit the Credit,

as really They’ve forward finish partners appreciative look our to very from the of new with our And this CIT, support executing we a in PNC. banking turnaround. building We’re partner. we what’s received we been great relationship

we’re and the perspective, events and Dealers with profitability those already and sales car to are real-time. new monitoring situation before expected were recent in margins COVID-XX, and industry an on from dealers the its in amplify decade-low had OEMs the impacts struggling Now struggles.

are The service and local authorities for dealerships it at not essential perspective, sales are some an a to the today and keeping from the vague. seems state-by-state some vary as of whereas designated purchase level, some very regulating ability are to consumers as cars just

a moving over our clients keeping is tell We’re considerably few with standards. is just have manner individual will the going changed approach local Things is, support in last in federal, alter go-to-market our what days. to again, you I and But to continue a to this target. dealer state, that

We’re monitoring right now. the situation

retail states There’s about of or have of those a some sales restriction kind. states that that at home is essential. stay said Six XX have

don’t that to they have is needs believe they at rest One group stayed the believe that vague the be on of dealer the bit states is one came it out or – or of dealer don’t they least and that said said a the advocate careful, it it.

environment, clients help this dealer-by-dealer, location-by-location through So and we’re their our them this working with businesses is a manage to really time.

demand when Nevertheless, get and the we business their the car will we’re the buyers to for return positioning do normalize. help to front our expect ourselves conditions time dealers as products in door through expect do market And we return comes.

times many really things is on for one calls, we As of I’ve stated prior that, business about like the this that we’re pay performance.

the with closely value. clients’ very aligned is value Our

essentially. if work they for You for don’t products pay our don’t you,

of providers as performance may challenge, our and We’re really with held to I a view some while some – opportunity. standard of of And much automotive very marketing the some view clients aren’t. other that our an a folks that that as

it’s us sales provide the quantifiable, real opportunities nature. that can We really in I purchase which are put We is and is hold to solutions for personal dealers high-quality types ultimately, that the also really going they to are provide, names help us be which think as intent, the systems. of dealers ROI CRM going the looking back, to come because standard. in market with to starts an we measurable,

normalize that’s help come the to us think to back. actually market I starts and as So going

we’re traffic and navigate to to environment dealers, as revenue improvements a operating and to So also current OEMs dealers clicks, OEMs and ourselves maintaining retail sales mix optimize to base. conversion, of in channel profitability growth. to key positioning acquisition all efficient and product make our emphasis our and opposed We’ll very help continuing with lean strong continue on the we’re quality, and a while of product with leads along summary, mix

are their work my the to want dedication COVID-XX commitment presented in best I just to that own doing to They’re response challenges way working some – I with. the also how gratitude and need. I they the clients Last, we’re by them say and I’m lies to our really to team’s support provide to the that their the facing to of just want to we thankful challenges want ahead. that reiterate by the

anything us. can we’re best it for questions with we going the and have that, to So for open answer do to we’ll up you

Instructions] Krowl from Riley you, comes Lee question Thank with FBR. B. sir. [Operator first Our

taking for Thanks my Great. questions, guys.

quarter out retail figure to trying of dealers? I was counts. I mix, down function first around of in retail OEM kind the on noticed wanted it was the optimization that and Just start is versus a out to dealer

for the Hey, question. thanks Lee,

on Now dealer come the We function it very normally of timing. one friction. of the year can see decline increase see is more that a with end to dealer at and back a We in our of budgets. an dealers little start look at count. a when is their marketing take product cancel And

those we So count the we throughout see year. come decline back see dealer of then some and clients

to frankly, about Really, is and past the continue proposition go-to-market at wood our to because presenting quite selling we proposition true it’s approach. our get need real. on measurable. dealer the our motion at when this count, better talked got just we our look to today. the to We’ve and value chop We’ve It’s improving in dealers, value

done always started is haven’t click job the example talking A rate, good it. attach of just we the about. We is something which presenting best

attach click improvements, and and Our product X% a wrong. me don’t that change. in product way. to now, do anything present underlying it’s a We’ve made like over get rate didn’t was quarters XX% some wasn’t other the than little a product of really It ago over we couple different start

wanted. perspective, But that weren’t dealer’s wasn’t we from we a getting why traction the that

retail the side business much that the a hoped. that’s make churn didn’t of perspective. So lot the had member we’ve has of lot do the to progress had of structural it motion. I we one of to on as with XXXX, that work with has team We a in selling has lot on improving the things do lot with from this top it do up as to to, and A of of a grading talent. the A been

the couple stops building feel now. Tampa. of starts in team a good with we’re and had at right about where But I We

has I to how solid with go does, we after think our products else upon. late. we’ve anything think, more a to good present build the it really and it do foundation then got I we market But how and

made it. margin, you’ve Got basis. about progress just And some a then gross thinking on year-over-year

way With the margin on And the progress first in talk I expectation the you ahead is level. of reset maybe right Is then kind and And that guess, made quarter first the second of today? back? just guys maybe of kind and about gross it? quarter, with then come just at volumes trend essentially complete, declines the think talk about the You’re slowdown? you higher can that it about have perhaps a to maybe

and Yes. just I’d business I I’ll very and and little We’ve then impacts it rare I’ll from malware that mean, talk January, a say, very, on that and finish didn’t bit had out. in we’ve back some of well, we margin up pick seen, which a running. let help incident J.P. briefly the we’re it overcome the up perspective.

we’re an And COVID make we have that then of with we have. continue how is of change the some But progress. impact the it’s seeing, mix issue revenue to to because to that going that going

and overall feel about the there, that but continue miss starts But on there? to continue line. the operating the our Like what taken and be I spend. have needs I some some to efficient did and I with get on had search optimized. we mean, said, mix We we to good I efficient more get trajectory We’ve to more fits continue out J.P., costs there we’re

to it margins mean, immediately, we wasn’t going we remember going ago, XX%. but there. get was a choppy. we be But It we time to that I straight everybody could be line. little to a a felt that It if back Yes. get told over wouldn’t be you year

XXs. the couple have high to straight of six started XX%-plus a the margin. months we and months six last last had higher We’d so numbers. The in gross in have we’ve teens year, a of And few

So that’s great.

this And to is saw that few We’re the solidly we’ll those back to into we start got QX build hopefully, at about the hopefully, start then be that – with going can and then you and And a year, in into with XX% again consistent XX%, couple range. of up in I range, what to get XX% a XX%. QX. see high-XXs next production think, mid-XXs,

then companies impact. Got just signaled of it’s leads obviously for kind and And months impact, the question it. auto me last and have others other three But one-month dynamic some of fairly a times.

than now, this As your kind relates just it is suspension? kind to Or expectation could kind expectation maybe there and of of that it of is an that a longer accounts that? base suspended a the is it for one-month case be

Yes. give expecting And Lee. But interesting to month. And times. transition I to you than it a question, several couple one expect be examples. it longer I’ll of That’s an I’m

the local So retail put at when reacted home, strongly for governments stay some states were retail some very and place, the restrictions reacted in dealers.

we And certain starting in dealers so had shutdown to states.

gotten we’ve that York days, Over starting the example, They’re open back last is to the is an opening is actually dealers back Maryland example, up. an couple of notices New Delaware an are example. up.

And I to so do going fits starts see impact I the expect prolonged. and here. we’re think to some be

with I will I that’s that that you bulk not retail. shared number and OEM, that also the that of impact the that’s in terms of that’s earlier you strategic tell

We bit, we’re as of because that – reasons these on as flick an see spend, SEM on of side, to marketing but of the as Because know, we’re and getting the you any it. front our of as haven’t out level in I a it’s retain seen back one expect we easy want spend a pulling not the to on of It’s switch do efficiency. why OEM well. impact much

kind in I a impact. be could I contract pullback. one-month a ways. expect more to I it I you. to I of and before expect do grow But hope with your question. specific that answered I to also meaningful wish more expect it certain grow we material But So it to expect than get be it I

got sure a very and the support into it’s you sale lobbying sales – Again, the it out of to is states its states, the that fascinating, folks the know. I way specifically in heavily called who we’ve the business a think also they’re I’m dealer are the of lot isn’t, central now – get handling Again, OEM service because clarifying. I you mean, and status. or retail support all

So do to a than a And expect to exactly because not, we’re it But and grow decline. just it I dynamic please useful? J.P., that be you it really dive situation, one-month basis. materially going and want I we expect impact into, if more and it’s to know. be don’t do I information can. this the hour-by-hour dealing give Is with – best to day-by-day we an before

I mind mean, impactful, the he total only thing we’re is overall $X.XX I line. the loss in not the I only would just add mean, revenue to bottom keep is margins. because XX% that that as to dropping

a Yes, I added times Certainly, appreciate lot, the guys. dynamic Thanks sense. that and detail. makes

Thanks, Lee.

Our next Prestopino Gary from with Barrington Research. question comes

good morning, everyone. Hey,

Gary, morning. Hey, good

a here. Just quick question

of couple questions, really. of well, In a – terms

terms the In line expected or going lighter had did in the to was than top your performance to? of it was the expectations up quarter, it would you in come

to made progress wanted we focus year. lighter is It lighter to to get going lot it It hoped. I performance the than be yes, out have in side a of – we’re to and last Gary, revenue came revenue the that we was This we’re it going the on have year, expecting. going to haven’t that growth have than we that. But expected and of in to did. more our – came on I again, than It side

like based of costs, looks It here a costs ex on your your It to $XXX like goodwill these there’s this structure, just income the $XXX like you’ve in assets. envelope the $X looks raw out million based off looks took here. statement and here. numbers on months. decrease you And break-even in impairment back And XX Okay. generate million on looks me, million got cost it sales order to then long-lived to between it like really and

here taking be you’ve know to manageable probably months? taking the in going terms probably you’re do great particularly low-hanging a But what of to that your else the of I for – job six costs, three of fruit. the you can situation in given costs out next done So

So take – we QX. early out late QX run close early rate did cost $X at QX, to another QX, million in

Gary, We retail efficient, what we to have of continue the get to find get get to again, But the our there. is, think opportunity. And that’s we marketing spend continue and we that to we So end at part have can areas do growing, we turn of again. side of more screw, day, to more the we the it. have efficiency

The is retail critical, it because produces about side characteristic because But we’ve margin business, not the business, side margin of the it’s all the positive. as with it’s talked that OEM really volume.

we’re the on talked that turn this Two One is we’re sales from we’ve fronts. so, And to about multiple continue attacking on screw. going side, to earlier. side, cost is, the that

don’t operational continue we’re to and I extract going We’re productivity. done efficiencies more to find think there.

on And haven’t then the product side, we something talked a about. bunch

changes small that impact. having making bunch actually of a We’re are

is stack those page a monetizing feel example Thank rate the distribution trajectory of to channel. north right? that’s Now XX%, we up, the be, The we’ve would click-through to to to we’re ad on. of going but new click continue the actually unit good we’re some have You An in we’re through about it – added

progress. up the a into which day lower-quality mix. dollars that what lower-margin. good up That’s And a high-margin of few lead is, That’s positive we’re thousand a revenue, new secondary is folding we’re we’re and revenue giving giving

day we’ll that So do all long.

some that metrics out of some with funnel well. we’re changes our conversion the improving of as rolling We’re

anything be add to Gary. J.P., miss that anything I to do home, there? going have of mix did us it’s those you or get So things a

year we about. in then lot year, of the the on you expand cost and at just initiatives mid-year – out more. said would some of the I even a No. those what later We last very end and year were took

So to the full see to those decisions. we’re yet is annual – benefit of going we still

down do $X else, So year see will for about million XXXX overall by XXXX. if nothing I think expenses from we we calendar

million. Okay, $X

weeks then, terms seeing in in And guys March of even if could you traffic, volume, QX click the you And it, much two first talk a just like start to haven’t the understand talk lead of step great. where going that’s terms can’t about trying you really did How down what’s – on I said, of in Okay, of if of about last volumes. this reported lead click the versus weeks I traffic, because fine, idea March? But magnitude an get two you here? of yet.

what What the of we’re you seeing market rest similar see is what overall. the to seeing. It’s very is Yes.

been is come back what’s we’re then we it traffic saw come down, so And interesting, and off. seeing Gary,

itself off on, what’s terms of call And a isn’t traffic couple things. because in great of traffic. But of going so, to it, XX% XX% a signal

One getting win, because spend easier is, pulling the auctions folks to are are out.

We’re with the many not people in as auction. competing

efficient. spend more our actually So is getting

cost per we love at won’t changes. and see lead is be the a And over it long-term there. to other – seeing we’re good overall. some just at without improvements sustainable so would some Our rate where actually It that

just right We’re dynamic. of it seeing now because market the

hands thing cars submitting I’m at and It worried starting going as and leads. The the to at is, well, home to quite frankly, be doesn’t are little a about, people they’re that come buying same mean our we’re around up they’re get is other trying traffic to rate.

XX% made they going announced really that year-over-year. J.D. worried kind to yesterday, to I’m demand XX% thing want They say, down, and there. going March sits the one of year-over-year before, the think down Power sales the think is is so down about XX% are day be underlying I they be mean, And April to year-over-year.

to the way what and to the they’re cycle, going buying the different a same, if quality looks to. elongate if going generating like consumers going of we’re are So generating buy in while which same we’re likely lead, leads they’re

XX are hard Ford’s incentives for buying X% all right? the GM, can that market. you deferral got about and right at stimulate you’re back assurance OEMs months is six-month program, great out keep program, If Now, it’s buy really at they’re look that there everything in to to got are Hyundai their for demand. pushing XX the if Nissan that don’t in now, they thinking time get months. to people a wrong, X all they’re me When doing with

generating we’re leads. again, But

down. is traffic Our

us on there, sell they in What is efficiency we us because means I’m the a form of about underlying expect within leads which to swing XX-day credit, ROI-based, that will of and is dealers cars Our because are up. back we the worried demand sell period. really kind

answering know a I’m So that wrestling right of but Gary, your good with if we’re question, all the now. things these don’t job doing are I

back dial We’re trying our to spend.

to competition trying now, as because much auction. less there’s right margin We’re again, possible as harvest the in

item That that now. luxury some the OEM considered quality, confidence which we’re at are how that feeling is triangulate to because a – just weekly on consumer And way right purchases the we’re these trying orders, at same through our home is between we’re purchases, about on making time, of to a moving closed and an and target, keep a incentives trying the basis. bit eye of these consumers stay watching rate and really

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Okay. cash And up money we’ve But that’s use a monthly do an Obviously, it annual until this – general, a you need a much basis? that’s lastly, on in tied how big lot like those in become looks of to run cash. business receivables. basis got monetized, or of then

the are basis credit for just… Well, that the line we our receivables

right. Right,

place. in ….put

we balances draw of So off we have the there. that

So we’ve got $XX million line. this now new

a will We under have that of we – million line, this minimum have $XX meet. draw to we

quarter. on $XX into million hand have going next will we So

Okay. should right? you? should And be, It for that be sufficient

so, believe I yes.

All right. you. Thank

Martinuzzi with question comes Street. Eric next Lake from Our

Yes. that to level the about sort of business. focus the working worked needs may next a – the as happens ceiling facility. concerned framing support right? I receivables credit dropping also to know on get just of three not the wanted down, The in as don’t the those I’m six that the capital months? But if I’m is there to that, risk a question, I

receivables quality XX% how line receivables matters have to value we’ll draw. Yes. the much availability of We – in of and certainly, to able the were we of age we access that matters. then on the – the The

a very So need decline would don’t we we’re that are those have I to to we minimum in less and this we’re if going more have think draw yes, started things spot. availability. very, that very I then, I aging good to mean, this think But and now very, draw on focused than we quality year,

mine on but not Have OEM any I’m going What a you of not certainly pay? about the coal in side, the ability? dealers to retail side seen an canary signals from on the invoice, saying that’s

out actually mean, may a to we the our the dealers. invoices go be others. that little vet process than before I So different

with gets able errors, it may before So have to we’re issues quality billed. reconcile even they them

debt company. So this result, little you in bad see as a very very,

actively this And reasons clients. of front be our of the been why a sales, we’re too, go status on, marketing that the also rightsizing they side clients our crew. shutting to for certain down the have make Eric, may spend marketing modifying the that’s spends the their because may and what’s size with We’ve we with but suspend with their not that working of skeleton going to we’re one on dealers

not a And because want they that to we are may keep skeleton as and means want XXX it leads, they they if may to that keep crew, to managing working well. But they leads, they people XX flowing. want people want go

we the look that suspend the think side with trying we’ve spend we’re status some help adjustments when to and their clients, So other the of them rightsize on us. to about at to this get made front of also we

on because, it. them to side they helps what with the and – – we well, So receivable ultimately which on expect work again, that they’re know as

And as quality Jared said, is lead important.

We’re help cars. trying dealers to these sell

and for being they they helps billed business. sure them that So their exactly and getting want make what what ordered we are drive to

Yes. I guess…

Okay.

thing... …the other

Yes, go ahead, Jared.

too, right, is, now still other bit these a to sales terms right deliver Payment more mix other a focused that we’re time our as well that, so thing leads hard of products more as with what traffic product, doing we’re on Pro would plus, well. a from add had really we’re more some we shifting have But sales, a on click web more. of we’ll our presenting little ago, value on One in I’d – perspective. the year Listen, downturn,

this clients. please with our we’re transition, too, working making as we’re So understand,

historically market just that, that to certain products and We other may that the move to dealers we’ve continuing pushed valuable of too. not in we’re be to local aren’t push as a some starting

condition. again, what align to So, a with done create worth, mix with bit the selling to it’s we’ve change offer work allows for client the us little we current more a the what and the get better to a foundation better perspective market from precise

you, Okay. Jared. And for question my last

time You’ve or auto-related for been specifically recession Any digital a marketing. a muscling your auto going Book, industry? Blue time the as far maybe time in Kelley around your long Automotive marketing through back your lessons and as with – at Autotrader digital Cox from learned way to the

No, it’s clients stay as focused ultimately, absolutely. simple with to think I do clients. Yes. aligned and on. your really stay rate on the what’s about volume it’s And with going

got to J.P.’s super earlier quality really so And lead is that point, on that. to really, important. We’ve focused stay

the have spend out spend actually things want. that on with to because you. And really we it media overall, proactive much of and harvest clients or SEM we’ve to some sneaking as up of align the of with get our a And create front got be to also upfront business, margin getting in demand and that the really our these these trends demand of way manage

news we’ve for know And belt it. that how the again, do a on year-and-a-half. our then, good And been sensing business just it’s XXX is, to good we is, listen,

This so, operational more there’s us. and be isn’t a that turn And to just there. continuing more efficiencies this productivity. and to more is had find And us we screw for change think

we’ve as Not businesses in it, for got because mind is to haven’t – a us they that it news for good been have strong the it are for we’ve doing a again, had But do that, while. my while. all muscle as

just that’s being home. say just here. of one, focused We too. noise would productivity. maniacally from are on for operational These got I working keep joys and I apologize efficiency So another background to the the

All for that right. I Thanks questions. appreciate myself. fully my taking

Thanks, Eric.

next Our with question Ed Instructions] Capital. comes [Operator Ascendiant Woo from

to you able think My there’s going be Yes. disruption disruptions to any chain. seeing cars? taking Thanks more dealers on my the you question. is production? question of with get for being any do supply And Are

Yes. Hey, good Ed. news The news, story. bad

side with entered a So supply. this days XX And we than into want with into this manufacturers with XX going had of of supply, their on days I supply. So like supply. XX days with, like XX and right? the I to say think lot some others. inventory entered more we good entered days GM got called FDA about news Ford entered

So supply bit we good had on ground. a of

weeks, where And to, the it’s to manufacturers, they anywhere OEM, Now, did. probably than and it’s declines. a they’re some and the right? to that, see couple going to be in where to longer shut that we to production come all plants they rolling of be start it agreement Probably an to right? the month, have the weeks on shutting But They know my going a month-and-a-half. to closer to they’re the UAW depending be estimation, to couple of already expect going going be plants, going from they they’re

day I’m falling, while. ground entered a think fall, expecting I sales good or the Also robust not got them inventory supply with rates we’ve they we’re stock. like again, for But into I this with car the with the new stock with have side, on more auctions been concerned overly digital most going the used ground Also car physical they side. mean, auctions closed. than and are on to physical

it’s either so or And digital nothing.

of a this struggle unless see a don’t for I supply period with time. prolonged goes

back to I the as side, they’re be think we’re as sell be going down is, ground demand consumer production to quickly. pretty an got that the to to hopefully, starts what we’ve we to increase on And ramp stock able going able industry. have the

it a month offline challenge. they or to production only next I or It going may the to a months. it Again, become extends in things, or disruptive if I be this two think, take okay. we’re foresee it is other two beyond month months, more do But gets that, don’t

and I a you, Thank luck. wish guys good Great. you

Yes. Thanks, Ed.

Global question comes Value Group. JP from with next Our Geygan Investment

morning. Good

discuss some developed? around You how and color – But how you an for that product more provides is that number customers. measurable your ROI you how and measure you ROI your put can

question. the for Thanks JP. Sure, Yes.

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data, retail RDR actually they delivery their their So report send data. us

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quality have terms of collectively can as or in a We ask for agreed contact rate credit. to dealer

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on time? you either how color that developed that’s us quantify some directionally over Can give or ROI

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afraid because to aggressive, value. we our in believe get not We’re

is Because And so more end for more this spend. believe in some at forms other we what measurable. with relation we substitute other to are that productive we’re very media of ROI their the the out dealer you day, competitive And do average for. of digital that very, with you the could of see us the than

Great. your since you company? you the at Can arrived discuss force, sales how that’s developed

Sure.

have do you to what still in terms your force? And sales developing of

Well, absolutely. Yes.

and business So we’ve teams pay it. what them we got side of I’ll two major One is call OEM sales the strategic individually. is the and

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upgraded six also over has leadership months. team, probably the The a from talent. lot last a perspective, eight of the transitioned to extensively We’ve

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of to it business of kind a far to as drive looking the because being helps the able their the actually our mix and on benefit better the to We’re we focus for margin we’re team better. getting dealers, at know that businesses also sustain

I good didn’t everything. go lot a that’s and So into a that’s retail the But side. think. there’s I know on overview, also I there

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It pushed forward. the like the We expected approach. to. didn’t we so, work way out And it we

right. good good get do And what we it us I trajectory to see about and tore So until and we we’re the to it right going now we the it you’re down We have a we’re But feel about I on. doing really craft. feel rebuilt again. continue that

Okay. beyond you’re more and enable above changes discuss that to affects and of AutoWeb? can and observing behavior you what a really mobile how question perhaps My trend has optimize is, that consumer in final you caused platforms, long-term your

ways Finding just Yes. there we’ll engage start beyond to five-line is important. and consumers form lead the

talked about and concept this and It’s as where in price matching past. product going matchmaker we’ve other we’re buyers than about geography. So about sellers dimensions and the think and we really

dealers to and to back are And – and to ultimately, some the going get to you beyond give my so, to have we’ve work, actually to that done just information have with because going some we’re work expectations there, continue are pricing. me do I’m going consumers

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other in well in categories vertical to like and second of We questions chatbots to a this appears – improve The what a some consumers that category like up quality vertical can’t the is, point them the answered. to until become as in things give to be well, lead, important. degree thing and the to of other where with things with folding interacting limited right basic going the more rapping, between be interaction consumers information, automated increasingly an see that’s seller

at can And increased the more and to a them point, propensity that you purchase consumer’ to transition effectively you’ve client.

then just that So over that medium to up us also you of to something that’s too going look And channels is communication, impact long-term. younger opening the other at buyers.

chat-based. that’s even the slack workplace e-mail workplace. that, of well place are – communication of other ways. more lot replacing a looks all all other them any and to And not erode E-mail place is a dominant form things these than It these the Microsoft starting and and really with teams other for in as

to other interacting thinking these connections working and our other too. on those And and with some we’re of is those So as SMS through important consumers about making things, going forms be and those things, well.

some of the trends. are So those broader I think

consumer product Digital geography. and about mentioned dimensions are what on than connect where really a price other buyers I able feeds experience to more earlier sellers and into and retailing robust

roadmap into So thinking, part that’s developed all of goes development on. and that and working and we’re we’ve product our really of our that product that

you time. for Thank Great. your

and get serve We guess, to very I JP, consumer other thing focused I affordability. I say segment affordability. when on I say is it comes. One would that, Hey, other specific thing apologize, I one would really a long-winded tend that’s

be important is higher make car consumers I if was little increasingly number helping are XX,XXX, haven’t at new bit XX,XXX, The recently. over so as affordability the days, a average looked And prices around decisions than the that to well. going not

increasingly buyers. rates are interest consumers at are, with even America. and consumers makeup we’re look going have to This being you decisions low to they bread Middle affordability help as because going good on these so, something auto is these them, on when again, be our the to is make butter that as And

it’s be I a then folks who $XX, this are in XX that area that month are think is months. important. really going in a in material to and something $XX, it has more hit on the previous extra than And that’s $XX, XX by These way to focused XX going them incredibly helping next to $XX, industry the $XX to months over much XX

This session. I’d over remarks. like concludes to closing turn to call for back the the Mr. question-and-answer Rowe

really Well, hey, say to maybe I earnings just We appreciate the look want thank to, you speaking I joining up you that’s call, next you call. forward everybody. coming know with I to shortly.

the you just also thank want team. everything, so to for And thank

from through. has made and the disruption. work continued engaged. way good on transition has you’ve teams These this team the get distracted home been with by where got a pleased easy times, team I’ve soldier Our that. are a manner. the in way the been pleased I’ve environment lot to pretty work the of It’s personal to to with

that just our need team but promises marketplace. do our stay proud has in that focused really what value to shareholders, value deliver and really the stay our we’re of But making on, the to work to also we deliver keep clients, not done to the focused on I’m to personalize, to

everything say us you call. I over So really you to of the really all that thank about all we joined just to for you done support. again, your the forward you want last that appreciate the look appreciate team results. I I QX to continue who And they thank and say for chat you’ve just to with do. – everything soon year to for

presentation. gentlemen, Ladies and today’s concludes this

have disconnect and wonderful now may day. a You